Wind Swirls to Reliable Power with 210m Euros
A wind farm in the Morocccan city of Essaouira. Ethiopia has
signed a 220-million-euro deal with a French company for the
construction of Africa's largest wind farm
14 October, 2008
(Addis Fortune) After going through a number of procedures and hurdles over the past five years, Ethiopia's wind power project last week leapt forward and started to roll.
To the delight of the energy authorities who, some months back, experienced a hard time due to seasonal electric power failures from the country's entirely hydro-dependent electricity supply, the Ethiopian Electric Power Corporation (EEPCo) signed a 210 mllion Euros worth contract agreement with Vergnet Group - a French company specialized in the manufacturing and installation of wind turbines - for the construction of a 120Mw capacity Ashegoda Wind Power Project, in Tigray Regional State.
The contract was signed on Thursday, October 9, 2008, between Meheret Debebe, general manager of EEPCo, and Marc Vergnet, cheif executive officer (CEO) of Vergnet Group.
Alemayehu Tegenu, minister of Mines and Energy, described the deal as a "turning point" in the history of the state's utility monopoly, whose power sources are largely hydro-power dominated. Introducing a wind park project is part of the company's strategic direction in diversifying the sources of its energy generating methods, according to senior government officials.
EEPCo has plans to expand its coverage of services from the current 17pc of the nation's geography to 50pc in the next two years. Enhancing its generating capacity from the current nearly 800Mw to over 3,000Mw is part of this effort; this is, however, helplessly dependent on a hydro-electric power generation scheme, thus exposing it to the vagaries of nature as was evident by the crippling power interruptions during the past Ethiopian fiscal year.
"By signing this contract with Vergnet, Ethiopia and EEPCo position themselves for sustainable development and energy self-sufficiency," Anne Marie Idrac, French minister of state for Foreign Trade, who had been on an official visit to Ethiopia last week, said.
The Ashegoda wind farm site is located 20Km south west of Mekelle town, the seat of the regional government, and 763Km north of Addis Abeba. It is one of the two locations in the country with proven potential to generate power from wind; the other location is near the town of Adama (Nazareth).
The French wind-turbine manufacturer was selected by EEPCo Board of Directors over its Chinese bidder, Cino-Hydro, not only for offering a lower project cost. It has also solicited for the financing of 205 million Euros from French banks.
The bulk of the loan - 160 million Euros - has been obtained from BNP Paribas, a French bank that claims to have a significant and growing presence in the United States and in Asia. The bank has a large international banking network, and a presence in over 85 countries with 169,800 employees worldwide, including 130,000 in Europe.
BNP granted the loan after receiving a 130 million Euros guarantee from Coface - a French government agency believed to be an authority in risk analysis. Coface supports companies in the monitoring, management, protection and financing of their accounts through its four business lines: Trade protection; rating and business information; management; and finance. It also provides export guarantees to French interests.
Coface, however, is not the only French government agency involved in Ethiopia's much needed and long awaited wind power venture, a renewable energy source. The Agence Française de Développement [French Development Agency] (AFD) has given the remaining 45 million Euros to EEPCo, so that it will be able to add 120Mw of power into the national grid from its generation of wind energy from the Ashegoda wind farm. When completed, this project will be the first of its kind in the country.
"The project has an implementation schedule of 36 months from the date of commencement to bring the whole wind energy converter (WEC) units into commercial operation," Meheret said, after signing the agreement.
The agreement furnishes Vergnet its third project in East Africa - the other two being in Kenya; the French company hopes to start construction works at the wind farm by the start of 2009. It will manufacture, transport, as well as install the wind turbines, and provide maintenance for about two years after the project is finalized. It is also expected to provide training for EEPCo's engineers in France, and on the site.
The first phase, to be completed in 2010, will ensure a generation capacity of 30Mw, immediately followed by the remaining two phases with each of them producing 45Mw, Marc Vergnet told Fortune.
"We are confident that Vergnet will complete the project in time," Meheret said. "It will be of world class standard."
Ashegoda Wind Power Project will be one of the six generation projects currently under construction in Ethiopia, with an overall budget of 3.1 billion Euros.
The project was initiated in 2003, along with the Kechema (in Adama of Oromia Regional State), Gondar, in Amhara Regional State, and Harena-Messobo (in Tigray). The feasibility study was undertaken by Lahmeyer International, a German based consultancy firm, at a cost of three million Birr, a fund sourced by the German Technical Cooperation (GTZ).
In June 2006, GTZ handed over the finalized study for Ashegoda and Harena Messobe, following which Enercon India Ltd. (EIL), a company engaged in the manufacturing, installation and services of wind power, was awarded the project. Enercon India, which is supported with the latest design and development from its Principals, Enercon GmbH (a German based umbrella company), however, had creased the Harena Messobe Project and suggested the Ethiopian side should focus on Ashegoda alone, according to an expert very close to the project.
The proposal was accepted. The contractor subsequently started work, only to leave the country in January 2007, without finalizing the project and before notifying the Ethiopian side, a source told Fortune.
Enercon's action prompted an international tender for which 17 companies bought tender documents. Nevertheless, only three - Vergnet of France, Cino-Hydro and Elswedy of Egypt - had responded with their respective offers. Vergnet was told it had won the bid in June 2008, according to the same source.